Airbus Pricing May Prick BAE,
But EADS Investors Feel Sting

Updated July 4, 2006 12:01 a.m. ET

Rothschild has put a price tag on Airbus, and it looks inexplicably low. The investment bank was charged with valuing the price at which BAE Systems could sell its 20% stake in Airbus back to EADS, owner of the remaining 80%. At &euro;2.75 billion ($3.52 billion), the valuation has come in at least 20% lower than anyone expected. The big question is whether the U.K. defense contractor will sell at all. If it does, it is a pretty bearish sign for Airbus. (See related article.)